Attention all hotels, restaurants, hostels, and caterers in Khyber Pakhtunkhwa! The KPRA has announced new tax rates and exemptions for your businesses, effective immediately. Here’s what you need to know:
Standard Rate:
- Previously, all businesses in this category were taxed at 15%.
Exemptions & Reduced Rates:
- Hostels:
- Student hostels are fully exempt.
- Others are taxed at 5% without input tax adjustment.
- Non-corporate local hotels, guest houses, and lodges:
- 8% without input tax adjustment.
- If using RIMS (Restaurant Invoice Management System), the rate reduces to 5% without input tax adjustment.
- Traditional “dhaba” style restaurants: 1% without input tax adjustment.
- Traditional accommodation (sarrayas, inns):
- 1% without input tax adjustment (if charges per bed are less than Rs. 300).
- Marriage halls, pandals, shamianas (including food services):
- 8% without input tax adjustment.
- Caterers:
- 10% without input tax adjustment.
Take Away & Delivery:
- These services are included in the above categories, regardless of being offered separately or as part of the main business.
Filing:
- Sales tax remains payable on a monthly basis.
Benefits:
- These rates offer significant tax relief for various sectors within the hospitality and food industry.
- They encourage formalization and transparency by promoting the use of RIMS.
